Migrate Users from On Premise AD to Azure AD with All Data Intact

The need to migrate users from on premise AD to Azure AD is a natural part of a growing business. Especially for those organizations whose employees are no longer confined to a single building but are spread out across the globe.

This move is done to level up the security, scalability, and simplicity of local identity management and turn it into a cloud-first platform.

Here we have a guide that serves as a step-by-step walkthrough for taking the users from Active Directory to the Entra ID. Let us first lay out the core reasoning behind this business decision and see how your business objectives match with others.

Why Admins Prefer to Migrate Users from Active Directory to Azure AD?

Bringing users from a local and limited Windows AD environment to the AAD (Now Entra ID) is in the minds of admins and business owners for the following reasons. Which we define as the RAISE up to the cloud:

R – Remote Accessibility: With AAD, users can get to the resources at any time and from anywhere.

A – Advanced Scalability: Being a cloud-first entity means organizations are no longer limited to their hardware capacity and can leverage Microsoft’s globally distributed data centers.

I – Identity Security using multifactor authentication, RBAC, and reduced risk of cyber attacks.

S – Smart Savings. In a recent Forrester report, it was mentioned that organizations that migrated users from AD to Azure AD experienced a 50% reduction in identity management costs.

E – Encapsulated environment inside the newly renamed Entra ID platform.

Now that we know the reasons, let’s start the preparations.

Pre-Migration Checklist to Migrate Users from Local AD to Entra ID (Azure AD)

Ensure your organization’s readiness for the cloud by completing the following:

Active Azure/ Entra ID Subscription: Purchase and activate any one of the available plans that fit your budget and requirements. Microsoft Entra ID P1 ($ 6 per user per month), Microsoft Entra ID P2 ($ 9 per user per month), Microsoft Entra Suite ($ 12 per user per month), a free trial is also available for each version.

Set up Azure AD Tenant: Admins must define a space where the users and other resources are created. Here is what you need to do in brief:
Sign in to the Azure portal > Open Microsoft Entra ID > Click on “Create.”

Then follow the on-screen prompts and fill in details like the organization’s name, desired domain, etc.

Verify that your Organization is the actual owner of the domain: 

Log in to Entra Admin Center > Go to Entra ID > Custom domain names.

Select the domain, copy the verification record (Get TXT Record).

Add TXT to your domain’s DNS > Wait (up to 48 hrs). After propagation, verify in Entra.

Download and install the Azure AD(Now Entra) Connect: 

Check for hardware and other prerequisites, then follow the official installation steps as provided by Microsoft. (Enabling it is a recommended process, although it is also possible to migrate without the AAD Connect service)

Prepare a Backup of the existing on-premise setup. This is a safety net against accidental data loss. Also, find what OU a user is in and prepare complete list.

Build a proper Network configuration: Admins must ensure that the network is free from interruptions and capable enough to handle the migration without breakdown.

After the pre-requisites are complete, move on to the main manual migration. There are two separate routes an organization can take we will explain both of them in brief.

Manual AD to Azure AD User Migration: A Step-by-Step Guide

Method 1: When users are already synced

• Do a last confirmation to check that all user data is really synchronized to Entra ID (formerly Azure AD).
• Use PowerShell to disable the Sync type in the following cmdlets:

Install-Module -Name MSOnline
Connect-MsolService
Set-MsolDirSyncEnabled -EnableDirSync $false

Admins must take note that this process can take hours/days, especially for organizations with thousands of users. Before any migration, it is important to check Active Directory user login history for the correct estimation of the active user count.

• Launch the Azure portal, there the  “Directory synced” option should be in the “No” position

Although the synced passwords and group memberships are usually retained. Users changing on-prem passwords during conversion might need to use their old password until reset in Azure AD.

Method 2: Create New Cloud-Only Users (No Prior Sync)

1. Use PowerShell to export user data to a CSV sample query:

   Get-ADUser | Select Name, UserPrincipalName | Export-Csv C:\temp\ADUsers.csv

2. Prepare CSV for Azure AD:
   • Go toAzure AD >Users >Bulk create.
   • Download and populate the CSV template with exported data.
3. Upload & Create: Upload CSV in the Azure portal to create new cloud-only users.
   • Monitor bulk operation status.

As businesses grow, their requirements evolve, and their team no longer remains in a single place. In such scenarios, localised identity management like Windows Active Directory no longer keeps up with the demands, prompting admins to migrate users from on-premises AD to Azure AD ASAP.

However, if this process is done without due diligence, problems can arise. Let us learn more about these.

Tool-Free Way to Migrate Users from Local AD to Azure AD Can Backfire

In the hopes of keeping migration costs low, admins may try to attempt the process on their own. However, this can be inherently risky. Below are some of the major challenges that admins need to watch out for during this epic transition:

• UPN Mismatch
• User Account Duplicacy
• Password Sync Errors
• Licensing Issues

Best Way to Leave the On Premise Active Directory and Enter into Entra ID

The SysTools Migrator for Active Directory to Entra ID Migration can help by allowing:

Download Now Purchase Now

• Automation of repetitive and complex tasks, like object fetching.
• A more comprehensive transfer of user objects and related attributes than the manual counterparts.
• Simplicity through a user-friendly script-free GUI.
• Offering more manageable user password transition options absent from the manual methods.
• In-depth postmigration reporting for better oversight.

Check out the sister tool that can help you conduct an effortless interdomain AD migration.

Steps to Migrate Users from On-Premises Active Directory to Azure AD

Step 1. Start the tool and use default default administrator login ID/password to open it.

Step 2. Configure Source (On-Prem AD) and Destination (Entra ID) domains with admin credentials.

Step 3. Fetch the entire user list from both Source AD and Destination Entra ID.

Step 4. Create Migration Scenario tasks for users.

Step 5. Set user default password options.

Step 6. Perform resource validation for users.

Step 7. Execute migration tasks for users (then continue with other objects).

Conclusion

Now that you have read this blog, it has never been easier to migrate users from on premise AD to Azure AD. Moreover, in our discussion, we saw how a seemingly free method for taking local Active Directory users to the Entra ID cloud can incur additional costs that surpass the cost of the premium product. To ensure this does not happen with your organization, you can use the professional solution given here.